Verizon to pay $7M over privacy violations

Verizon has agreed to pay $7.4 million over charges that it used subscribers’ personal information to target advertising toward them without their knowledge or consent.

According to the Federal Communications Commission (FCC), the telephone giant used personal data about approximately 2 million customers' billing or location information to sell services to them without first informing them of their rights or telling them how to keep their information private.

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The $7.4 million payment is the largest in the FCC’s history for a case about the privacy of telephone company subscribers.

“In today’s increasingly connected world, it is critical that every phone company honor its duty to inform customers of their privacy choices and then to respect those choices,” Travis LeBlanc, acting head of the FCC’s Enforcement Bureau, said in a statement.

“It is plainly unacceptable for any phone company to use its customers’ personal information for thousands of marketing campaigns without even giving them the choice to opt out.”

Under the law, phone companies are prevented from using personal information about subscribers unless they get their approval first, either by having them opt in or giving them a chance to opt out.

Verizon typically offers people a way to opt out of the marketing, the FCC said, usually in their first bill or a welcome letter.

Starting in 2006, however, and continuing for several years, the commission found that about 2 million people never received those notices. The FCC said Verizon officials did not realize that the problem existed until September 2012, and did not notify the agency until January 2013.

Verizon spokesman Ed McFadden said in a statement that the FCC-required notice was “inadvertently” not given to some landline customers before they received marketing materials for other Verizon offerings.

“Verizon takes seriously its obligation to comply with all FCC rules, and once we discovered the issue with the notices we informed the FCC, fixed the problem and implemented a number of measures to ensure it does not recur," he said.

In addition to the cash payment, Verizon has also agreed to take a number of steps to make sure subscribers are aware of their ability to keep information from being used for marketing.